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Deloitte published last year the first edition of the Property Index
- a directory of prices and housing factors across the continent. It
analyses factors influencing the development of residential markets and
compares residential property prices in selected European countries and
cities.

Summary of Housing Prices in Europe

Global economic slumps in 2008 and 2009 have led to a long path to
recovery. Expectations have not been met and concerns about specific
country's economies have made for an uncertain situation and wary
buyers. High levels of unemployment continue to plague nations like
Spain, Greece, and Portugal. A negative outlook leads the report to
state...

"...a continuing significant economic recovery from the crisis cannot be expected in Europe in the near future."

Factors Affecting Housing Prices

Many factors affect the price of property and these can differ
between countries and its major cities. The main factors involved in the
study include:

Intensity of residential development

Ownership structure of the housing stock

Standard size of the dwelling

Consumer Costs

Consumer costs of housing in the European Union include items
such as rent, services, repairs and reconstructions. In 2011, this cost
exceeded €3,200 per citizen and €5,800 per household. The highest costs
are found in France and Denmark, with the total housing costs in these
countries exceeded the European Union average by 41% and 70%
respectively. The lowest housing costs were reported in Hungary.

Housing Development Intensity

Housing development intensity refers to the rate of
development. The residential market of the European Union showed 3.9
completed apartments per 1,000 citizens in 2011. The highest housing
development intensity was seen in Spain (6.5 completed apartments per
1,000 citizens) and France (5.7 completed apartments per 1,000
citizens). This is surprising that some of the countries most threatened
by financial issues - Spain, Italy and France - are among the countries
with the highest housing development intensity. In Spain, this is at
least partly due to the development of holiday apartments (secondary
housing) and the Spanish government's administrative support (deduction
for buying a primary apartment for taxpayers with incomes above €24,100,
end of 2010).

Housing Stock

Housing stock refers to the physical number of dwellings. The
average housing stock in the European Union in 2011 was 474
apartments per 1,000 citizens. Spain, once again, has the greatest
housing stock. Poland has the lowest housing stock at 26% below the
European average or 355 apartments per 1,000 citizens.

High & Low Markets

Paris is not only the most expensive housing in Europe, but prices
double that of other EU cities. The average transaction price exceeds
€8,000 /m2 and has seen a sharp rise in price the past two years. Other
French cities, such as Lyon and Marseille, are also at the top of the
list.

The highest price growth was seen in France, followed by Germany. The
country has a high GDP per capita and one of the most affordable own
housing costs. Berlin is one of the 5 capital cities that exceeded the
national average by more than by 50% (along with Copenhagen, Warsaw,
Vienna, and Amsterdam). Frankfurt and Hamburg also have prices that
exceed the national average by more than double.

Cheapest Cities

Cities in the Central and Eastern Europe region often offer the best value. For example, Budapest
has an average transaction price of € 940/m2. The country has
experiences the biggest drop in prices at -20,1% in local prices (HUF). Warsaw has an average transaction price of €1,922/m2.

For more about properties and how to buy, check out our comprehensive city guides with sections on "Buy house or flat".